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KLCI Slips Ahead of Fed Interest Rate Decision
Thu, 20-Mar-2025 07:33 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI snapped its three-day winning streak on Wednesday, dropping 0.7% following overnight losses on Wall Street. The benchmark index was dragged lower by sharp declines in CIMB and Axiata, both of which have significant earnings exposure in Indonesia, after the Jakarta Stock Exchange Composite Index plunged more than 7% on Tuesday due to concerns over economic stability and consumer sentiment. Bursa Malaysia was closed on Tuesday for public holiday. Despite the weakness in the benchmark index, lower liners bucked the trend, showing resilience. Sector-wise, gains were led by Energy (+0.7%) and Healthcare (+0.6%), while Construction (-2.2%) and Financial Services (-1.0%) were the top laggards.

 

Global Markets Review: Wall Street rallied on Wednesday after the Fed left interest rates unchanged and retained its forecasts for two rate cuts in 2025. In Europe, markets closed slightly higher, with the pan-European Stoxx 600 up 0.2%, extending its gains to a fourth consecutive session after Germany passed a landmark fiscal package on Tuesday. Meanwhile, Asian markets ended mixed following the sharp overnight sell-off on Wall Street. Japan’s benchmark Nikkei 225 slipped 0.2%, while the broader Topix index gained 0.4% as the BOJ held interest rates steady at 0.5%, in line with expectations. Chinese equities retreated from recent stimulus and technology-driven rally. The Shanghai Composite Index edged down 0.1% while the Hang Seng Index inched up 0.1%. In Indonesia, the IDX Composite Index rebounded 1.4% after Indonesia's financial services regulator allowed listed companies to buy back their stocks without shareholders' approval, while the central bank conducted currency intervention to calm markets.

 

Market Outlook: As tariff concerns and trade tensions persist, we anticipate heightened volatility in the market. That said, we expect the local bourse to resume its rebound today, tracking overnight gains on Wall Street. Additionally, the Nvidia’s GPU Tech Conference (GTC) takes place this week, which could drive interest in the Technology sector.

 

Sector focus. We continue to favour defensive sectors, such as REITs, Healthcare (excluding gloves) and Utilities, which may provide stability amid market uncertainties. Gold-related stocks may attract interests today as gold prices continue to hit new highs. Technology sector could also see renewed buying interest, mirroring Nasdaq’s overnight gains.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI gapped down to snap a three-day winning run as the key index defended the 1,500 psychological level. Indicators remained negative with the MACD Line lingered below the Signal Line, while the RSI hovers below 50. Immediate resistance is located at 1,570. Support is envisaged around 1,500.

 

Company News (source: various)

Samaiden Group Bhd has signed a 21-year power purchase agreement with Tenaga Nasional Bhd to develop and operate a solar photovoltaic facility.

 

Solar energy solution provider Solarvest Holdings Bhd said it's 60%-owned unit, Nextree Synergy, has signed a large-scale solar PPA with Tenaga Nasional Bhd to develop and operate a 60MW solar plant in Kuala Langat, Selangor.

 

Jeweller Poh Kong Holdings Bhd said its second quarter net profit rose 4.78% to RM29.60 million from RM28.25 million a year earlier, on the back of higher gold prices. 

 

Affin Bank Bhd and MUFG Bank (Malaysia) Bhd, a subsidiary of Japan-based Mitsubishi UFJ Financial Group Inc, have signed a three-year memorandum of understanding to strengthen Malaysia-Japan trade.

 

Eco World International Bhd recorded RM58 million in property sales in the first four months of FY2025, but reported zero revenue for 1QFY2025, as overseas sales do not immediately translate into revenue. The company posted a net loss of RM3.75 million, citing lower forex gains and weaker joint venture profits.

 

Video surveillance company ITMAX System Bhd has secured a contract from the Seberang Perai City Council worth RM26.60 million. 

 

ACE Market-bound Lim Seong Hai Capital Bhd reported a 19% year-on-year increase in net profit to RM18.5 million for 1QFY2025, up from RM15.5 million, driven by higher gross profit from construction works in Tangkak. 

 

Gagasan Nadi Cergas Bhd has secured an en-bloc sale of 523 affordable housing units in the City of Elmina, Shah Alam, for RM134.41 million. 

 

Construction and property development group NCT Alliance Bhd is acquiring a 51% stake in Sabah-based Setara Juara Sdn Bhd for RM22 million. 

 

YTL Power International Bhd expects to launch Malaysia’s first Nvidia supercomputer in early third quarter of this year, making it one of the first cloud providers in the Asia-Pacific to offer Nvidia’s Blackwell platform. 

 

Heitech Padu Bhd CEO Hasrul Azuan Mohd Yusof has resigned after just three months in the role, effective immediately, to pursue other career opportunities. 

 

IGB Commercial REIT and IGB REIT announced the resignation of CEO Elizabeth Tan Hui Ning, 41, due to medical reasons, effective immediately. 

 

Favelle Favco Bhd has secured five contracts worth RM147.1 million for offshore and tower cranes. 

 

Sapura Industrial Bhd has partnered with Germany’s Mubea Fahrwerksfedern GmbH to enhance its production of hollow stabiliser bars and high-stress coil springs. 

 

TSR Capital Bhd has secured a RM219 million contract from Kwasa Land Sdn Bhd for infrastructure and water reservoir construction at Kwasa Damansara, Sungai Buloh. 

Sentiment: Positive
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